GRAND RAPIDS, Mich.—The $10.4-billion Lake Michigan Credit Union is buying another bank in Florida, including a subsidiary that does aircraft lending.
The CU said it plans to purchase $656-million Tampa-based Pilot Bank and its National Aircraft Finance Co. subsidiary in an all-cash transaction.
In connection with the transaction, shareholders of Pilot will receive $6.25 in cash for each share. LMCU will also cash out the outstanding options at Pilot at the difference between the strike price and the per share cash consideration to Pilot shareholders, the CU said.
The bank made $6.1 million in net income in 2020, according to FDIC data.
The boards of both financial institutions have unanimously approved the purchase, which will bring LMCU’s footprint to 19 branches in Florida and total assets of over $1.7 billion in the state. The combined entity will have over $11 billion in assets across its Michigan and Florida operations with a total of 65 branch locations and nine mortgage offices.
As CUToday.info previously reported, LMCU in 2018 purchased Encore Bank, headquartered in Naples, Fla. The CU in 2018 also purchased a Rochester Hills, Mich., branch of CCF Bank, a subsidiary of Citizens Community Bancorp.
“We are thrilled that Pilot Bank and NAFCO have agreed to join with Lake Michigan Credit Union, bringing together two organizations that have a shared philosophy of putting our members and customers first,” said Sandy Jelinski, president and CEO of LMCU. “This is another step in our plan to enhance our member value and experience for our many wonderful members that live in or vacation in Florida, including those in this new thriving market, as well as future new members.
“The combination of the two operations will further enhance LMCU’s product offerings for our members through Pilot’s aircraft finance business and SBA origination channels, while also adding a strong core deposit base in Hillsborough, Polk and Pinellas counties,” continued Jelinski. “We look forward to welcoming the staff of Pilot to the LMCU family and the customers as new members of LMCU.”
Execs to Remain Aboard
Added Roy Hellwege, chairman and CEO of Pilot, “The board of directors and executive management team of Pilot Bancshares, Inc., are extremely excited about joining an outstanding organization in Lake Michigan Credit Union. Our board of directors carefully evaluated the impact on our four key constituents; our valued employees, our clients, the communities we are privileged to serve, and of course, our shareholders. Given the shared values of Pilot Bank and Lake Michigan Credit Union, we have no doubt that this is an outstanding outcome for all concerned parties.”
Upon completion of the transaction, Hellwege will join LMCU as president – Central Florida, while NAFCO’s Kevin Buckland will join as president – Aircraft Finance, according to the credit union.
The transaction is contingent on approval by the shareholders of Pilot and is expected to be completed in the fourth quarter of 2021, subject to all required regulatory requirements and approvals and the fulfillment of all customary closing conditions.
New Line of Business
Michael Bell, the pioneer of credit union purchases of banks and a partner and co-chair of the Financial Institutions Practice Group at Honigman, LLP in Kalamazoo, Mich., who is representing LMCU, said the deal is a strong example of how credit unions are expanding their geographic footprint and also adding new capabilities.
“Lake Michigan’s non-organic growth has been strategic and deliberate and in my opinion it has brought them strong success,” said Bell, who has been involved in more than 40 whole-bank agreements, plus additional bank branch purchases. “The strategy has worked for them. They are also picking up a new line of business, and new capabilities, with aircraft lending. Regulators and members both appreciate diversification of assets and offerings.”